Tennant in Common TAX questions in state of MA

[differnet]

My in-laws have have an unfinished addition on their house it is approximitaly 1200 square feet. So their offer to finish it as an inlaw apartment is quite tempting. Here are the details. AsS of now we are discussing us (my wife and I) finishing the addition and blocking it from the rest of the living space, essentially making our own home. the kicker is this needs to be economical for us. by doing this my wife and I expect to become Tennants in common of approx. 25-30%, what if any tax breaks and or liabilities would this carry with it? WE are probably going to get a loan for the renovations, would the interest paid on the loans bee tax deductable? Would any home repairs we did to the home be deductable? and how would payment of property taxes be assessed? Also is the matter of ownership and equity where would I stand on this? What kind of equity would we carry in this home?
Thanks
Dan

 

[loku]

Tenants in common

If your in-laws transfer an interest in the house to you and your wife, then you would be entitled to the same tax benefits in that portion of the house as you would in a house you owned. You can deduct real estate taxes you pay on that portion of the house, and you can deduct interest on loans for renovations if the loans are secured by a mortgage on your portion of the house.